In reality, a price is a signal that informs us of the scarcity or abundance of an asset. Simply put, if prices go down, that informs us that there is a greater abundance of that asset and/or less demand for that asset (all things being equal). Likewise, when prices go up, there is a scarcity and/or increased demand and resources should be attracted to produce that asset, which would likewise tend to push prices down. Imposing a price on a good by legislation which is artificially below its actual market value always involves someone else paying for the difference, as well as misallocation of resources and consequent scarcity.
Essentially it all comes down to the basic supply and demand curve, and there are multiple reasons why demand is skyrocketing whilst supply is somewhat stagnant. Cultural shift plays an undeniable role; as the Irish institution of the traditional family is gradually eroded, more people need to be housed individually. Still, on the cultural note, there seems to be an underlying popular animosity towards owners who have the vision to adapt their rented properties to meet increased demand (“slum landlord” is a moniker I heard frequently in Dublin). This is hardly a clever strategy at a time when we need more creative entrepreneurs to bring new ideas into the market.
Yes, the old supply and demand curves strike again and people just don’t seem to understand how they work. When the supply of housing is constant and more people want it, the price of the housing will go up. In Ireland’s case rampant illegal immigration is making prices soar and the politicians are not willing to take the heat for the problem. And so it goes, everywhere.